The MarketPulse Quarterly - Property Data Leader · September 13, 2012 Securing A Sustainable...

With Quarterly Executive Letter

Volume 1, Issue 9

September 2012

© 2012 CoreLogic Proprietary and confidential. This material may not be reproduced in any form without express written permission.

ii

September 13, 2012

Securing A Sustainable Recovery in Housing

By many measures, the U.S. housing market is steadily improving in 2012. Prices are stabilizing or rising in

many markets, the levels of delinquencies and foreclosures continue to drop, and the purchase demand for

homes is beginning to exceed supply in a number of areas in the country.

In this issue of MarketPulse, we introduce the CoreLogic® Real Estate Strength index (RESi™) which measures

the strength of the real estate market based on the health of individual markets, their local economies and

mortgage performance. As you will see inside this issue, the RESi shows that the housing market has rebounded

from 2009’s lows and the posture of consumer credit and the overall economy is improving.

This nascent housing recovery, together with a prolonged period of historically low interest rates, is producing

a much stronger year for mortgage originations than many experts originally forecasted. For example, the

Mortgage Bankers Association recently increased its forecast for 2012 to just over $1.4 trillion, up about

40 percent from initial estimates. The sentiment around 2013 origination volumes is also growing more positive.

Despite these trends, we still face very serious headwinds on our way to achieving a truly sustainable and

healthy housing industry. Some of the more important issues we face include continued high unemployment

rates, fragile consumer confidence, the overhang of negative equity, and the persistent lack of clarity and

cohesiveness around government policy and regulations.

Today, a lender making a single mortgage loan, depending on where it is originated, could conceivably be

required to comply with more than a hundred federal, state and local regulations. Ultimately, a full housing

recovery will be facilitated by a clear and balanced set of regulations with oversight that is effectively

coordinated across all relevant levels of government.

The mortgage industry is closely following the trajectory of several major regulatory initiatives with the

potential to impact the size of the origination market and the return of private capital to housing finance. Two

areas of concern are the definitions of qualified mortgages (QM) and qualified residential mortgages (QRM).

Many of our clients and leading industry groups—the Mortgage Bankers Association, the Asset Securitization

Forum and the Financial Services Roundtable—have weighed in on the need to get these definitions right.

From the CEO


iii

Another big change on the horizon comes in the form of Basel III, which will have significant ramifications on

a number of levels for large banks and financial service companies. One change in particular, how mortgage

servicing rights (MSRs) are counted toward equity, is already beginning to reshape the servicing industry, making

servicing less attractive to large banks. It could also create opportunities for new entrants, as trillions of dollars

in MSRs might change hands as a result of this new rule.

The future of the GSEs will also have a significant impact on the future of our industry. Bear in mind: the GSEs

and the Federal Housing Administration currently back more than 90 percent of all new originations, and play

central roles in dealing with the foreclosure crisis. Whether and how the GSEs are de-commissioned, in what

time frame and to what degree private capital will play in supplementing or replacing them, are all crucial

decisions that will be made by the next administration and Congress.

By now our industry has learned the painful lesson that not everyone is prepared to be a homeowner. However,

it’s in our collective best interest to see that the pendulum doesn’t swing further than intended, causing

homeownership, long an achievable goal for most Americans, to become a privilege out of reach for many who

desire it. This is the tightrope on which industry and regulatory interests must be balanced to achieve greater

levels of certainty and stability. Doing so through clear, objective and unambiguous rules will contribute to an

environment where the origination and capital markets can grow and ultimately flourish.

Sincerely,

Anand Nallathambi

President and Chief Executive Officer


iv

The MarketPulse – Volume 1, Issue 9

The Authors

Anand K. NallathambiPresident and Chief Executive Officer

Anand K. Nallathambi is the president and chief executive officer of CoreLogic, a leading provider of consumer, financial and property information, analytics and services to business and government. Nallathambi is responsible for all aspects of the CoreLogic business.

Sam KhaterDeputy Chief Economist

Sam Khater is deputy chief economist for CoreLogic. He is responsible for providing in-depth economic, mortgage market and real estate analysis and leads the CoreLogic mortgage analytics and economics team.

Katie DobbynSenior Economist

Katie Dobbyn is a senior economist for CoreLogic with the mortgage analytics and economics team. She is responsible for modeling all aspects of the mortgage and real estate markets.

Gilberto MéndezSenior Business Systems Analyst

Gilberto Méndez is a senior business systems analyst for CoreLogic with the CoreLogic mortgage analytics and economics team. He is responsible for managing all mortgage and real estate data analysis for national and local-market media requests.

Table of ContentsFrom the CEO ............................................................... ii

The Authors ................................................................... iv

Media Contacts ........................................................... iv

The MarketPulse...........................................................1

Residential Development to the Rescue ..............1

Land Sales Poised to Drive Growth .................1

Driving America Forward with Oil, Construction and Social Media ...............................3

Real Estate Strength Index (RESi) ...................3

Most Improved Markets ......................................4

Black Gold or Most Improved States .............5

Conclusion ................................................................5

Fine-Tuning Your Instrument ..................................6

In the News .....................................................................6

National Summary July 2012 .............................7

Largest 25 CBSA Summary July 2012 ............7

State Summary July 2012 ...................................8

Prices ..........................................................................9

Performance ........................................................... 10

Sales ........................................................................... 11

Variable Descriptions .......................................... 12

Media ContactsFor real estate industry and trade media:

Bill Campbell [email protected] (212) 995.8057 (office) (917) 328.6539 (mobile)

For general news media:

Lori Guyton [email protected] (901) 277.6066

mailto:bill%40campbelllewis.com?subject=

mailto:lguyton%40crosbyvolmer.com?subject=

The MarketPulse

1© 2012 CoreLogic Proprietary and confidential. This material may not be reproduced in any form without express written permission.

he U.S. economy remained in

the slow lane in August with

reports of sluggish job growth

and a decrease in consumer confidence.

Consumer confidence is at its lowest

level since November 2011. Given the

weak labor and retail sales markets and

rising gasoline prices, it’s not a surprise

consumer confidence is lagging.

Employment grew by only 96,000 in

August, down from 141,000 in July

and well below historical standards to

sustain economic growth.

However, as we have argued for several

years, change in income is a much

more important barometer of economic

health even though it does not receive

the same attention as the labor report.

Real disposable per capita income

increased 2.0 percent in July. While

this is the highest rate since April 2011,

the increase is low considering that

incomes were basically flat for most

of the second half of 2011 and early 2012. In addition, the Bureau of Labor Statistics biennial worker displacement data indicated that about one-third of those reemployed with full-time salaried positions had incomes at least 20 percent lower compared to the income of their previous position. So while positive job growth is good for the economy, it is not impacting income growth as it has in the past.

Land Sales Poised to Drive Growth

While robust economic growth remains elusive, the housing market is accelerating by any measure. Sales are up, mortgage performance is improving, and prices are rapidly improving. All of this is putting home values back in the spotlight.

While it is understood that the U.S. market experienced a home price bubble and bust, technically the market went through a land price

Residential Development to the RescueBy Sam Khater

Housing Statistics (July 2012)

HPI YOY Chg . . . . . . . . . . . . . . .3.8%

HPI YOY Chg XD . . . . . . . . . . .4.2%

NegEq Share . . . . . . . . . . . . . .21.8%

Shadow Inventory (04/2012) . . .1.5m

Distressd Clearing Ratio. . . . . 0.75

Distressd Discount. . . . . . . . .39.5%

New Sales (ths) . . . . . . . . . . . . . . . 22

Existing Sales (ths) . . . . . . . . . . . 263

Mean Actv List Price . . . . . 278,684

Active DOM Mean . . . . . . . . . . . 168

Months' Supply Listings . . . . . 6.56

Closed-to-List Price %Chg . . .-4.3%

Volume 1, Issue 9

September 13th, 2012

Data as of July 2012

T

Cont...

FIGuRE 1. LAND SHARE OF VALuES IS VERY CYCLICAL AND CuRRENTLY LOW

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

1951

Q4

1953

Q3

1955

Q2

1957

Q1

1958

Q4

196

0Q

3

196

2Q2

196

4Q

1

196

5Q4

196

7Q3

196

9Q

2

1971

Q1

1972

Q4

1974

Q3

1976

Q2

1978

Q1

1979

Q4

198

1Q3

198

3Q2

198

5Q1

198

6Q

4

198

8Q

3

199

0Q

2

199

2Q1

199

3Q4

199

5Q3

199

7Q2

199

9Q

1

200

0Q

4

200

2Q3

200

4Q

2

200

6Q

1

200

7Q4

200

9Q

3

2011

Q2

Land Share

Fig 1 land share of total home value 091012

Change in YOY PricesChange in YOY REO Share

Source: FRB Q1 – 2012


2


bubble and bust. The value of a home

is composed of the land and the

improvements, or the structure put

on the land. As of the first quarter

of 2012, land constituted 14 percent

of total residential value, while

the structures accounted for the

remaining 86 percent. This works

out to $2.3 trillion attributable to

land and $14.1 trillion for the

value of the structures1.

Over time those shares can rapidly

change. While the replacement

value of the structure increases

linearly, the value of land is

extremely pro-cyclical (Figure 1).

Since 1951, the land share of total

home value averaged approximately

23 percent, with very large swings

in the share that conform to the real

estate cycle. For example, in the ten

years leading up to the peak in values

in 2006, the annualized increase

in land values was twice that of the

annualized increase in structures.

Since the peak in the first quarter of

2006, land values collapsed by a total

of 74 percent, while structures rose

4 percent. Consequently, the entire

drop in home values was due to a

collapse in land values.

Clearly, land is a critical cyclical

component because it drives home

values. Land sales are especially

important because they are a

precursor to improvements (i.e.,

construction) on the land, which

yield high economic multipliers and

have been a large missing component

of the economic recovery thus far.

After a false start in 2009 related

to the homebuyer tax credit-fueled

sales increase, land sales are now

rising (Figure 2). As of June 2012,

land sales increased 9 percent from

a year earlier and rose in five out

of six months this year. In the

early-to-mid 2000s and 2009,

growth in the amount of land

sales began to rise earlier and

sustained higher growth levels

relative to permits, indicating

an increasing stock supply of

land for residential development.

The most recent growth in land

sales is following the rise in new

construction permits. Since a permit,

and subsequent construction and

sale, requires available land, and given

that the supply of land controlled

by homebuilders is very low, it may

indicate that land sales are set to

increase rapidly (assuming supply is

available where demand is rising).2

With the land share of total value well

below its long-term average, if land

sales begin to increase rapidly, don’t

be surprised to see home prices rise

more quickly than traditional income

and rent-to-price fundamental

indicators warrant, especially in

land constrained areas. Growth in

land sales and prices would be an

additional positive development by

contributing to the much sought-

after but elusive economic growth.

“Growth in land sales and prices

would be an additional positive

development by contributing to

the much sought-after but elusive

economic growth.”

End.

FIGuRE 2. LAND SALES uP, BuT LAGGING CONSTRuCTION

Fig 2 land sales up but lagging construction 091012

Change in YOY PricesChange in YOY REO Share

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

1-Ja

n-0

1

1-Ju

n-0

1

1-N

ov-

01

1-A

pr-

02

1-S

ep-0

2

1-F

eb-0

3

1-Ju

l-0

3

1-D

ec-0

3

1-M

ay-0

4

1-O

ct-0

4

1-M

ar-0

5

1-A

ug-0

5

1-Ja

n-0

6

1-Ju

n-0

6

1-N

ov-

06

1-A

pr-

07

1-S

ep-0

7

1-F

eb-0

8

1-Ju

l-0

8

1-D

ec-0

8

1-M

ay-0

9

1-O

ct-0

9

1-M

ar-1

0

1-A

ug-1

0

1-Ja

n-1

1

1-Ju

n-1

1

1-N

ov-

11

1-A

pr-

12

Land Sales Permits

Source: Census June 2012

Footnote

1 Estimates using the Federal Reserve Flow of Funds.2 What Home Builders Need: Locations, Locations, Locations; Wall Street Journal: June 18, 2012.

http://online.wsj.com/article/SB10001424052702303768104577460841958115800.html

http://online.wsj.com/article/SB10001424052702303768104577460841958115800.html


3


Driving America Forward with Oil, Construction and Social MediaBy Katie Dobbyn

Footnote

3 Source: IHS Global Insight macroeconomic data

Cont...

he old adage that all real

estate is local also applies

to market recoveries. Real

Estate markets recover for a variety

of reasons. Some are led by rising

house prices and reduced negative

equity, while others recover due to

the fundamental economic strength

of that market. The nature and

strength of market improvement

depends on how each market was hit

by the housing collapse, its particular

economic strengths and, for some,

their unique natural resources.

The diversity of the real estate

recovery makes it difficult to form

a comprehensive view of the health

and strength of multiple markets

using a single measure or statistic.

A more holistic understanding of

improvement and relative health

requires analyzing many different

dimensions that impact the overall

strength of each local market.

Real Estate Strength Index (RESi)

In order to examine the different

dimensions that affect the vitality of

markets, CoreLogic created the Real

Estate Strength Index (RESi). RESi is

a monthly index that compares and

ranks the quality, sustainability and

health of metropolitan markets by

incorporating economic, residential

real estate and mortgage factors. Each factor is measured using the three component indices that comprise RESi: the Economic Health Index, the Real Estate Health Index and the Mortgage Finance Risk Index. The Economic Health Index represents the strength of a market’s economy and is built using market-specific unemployment rates, non-farm employment levels and gross domestic product3. The Real Estate Health Index measures the strength of real estate by utilizing house price appreciation, total sales pace, distressed sales and new home sales share, as well as the overall balance of supply relative to demand. Finally, the Mortgage Finance Risk Index accounts for the presence of

credit risk and the “dual triggers”

necessary for default in the market

by incorporating average credit score,

average origination loan-to-value

ratios, serious mortgage delinquency

and negative equity shares.

The three sub-components are

combined using a weighted blend to

form the overall RESi for each market.

The index is a monthly time series

that utilizes data back to January

2000 in the construction of the index

and ranges from 0-100, a higher

score indicating a stronger market.

RESi was created to not only allow

one to rank and compare markets at

a specific point in time, but also to

provide the flexibility to understand

the strength of markets over time.

T

FIGuRE 1. MOST IMPROVED MARKETSBased on Year-Over-Year Change in RESi

Rank Market RESiYear-over-Year change in RESi

RESi Ranking within top 100

1 Boise City-Nampa, Idaho 49.04 14.9% 9

2 Phoenix-Mesa-Glendale, Ariz. 48.32 13.9% 14

3 West Palm Beach-Boca Raton-Boynton Beach, Fla.

43.27 10.9% 71

4 Salt Lake City, utah 47.93 10.5% 17

5 San Jose-Sunnyvale-Santa Clara, Calif. 52.84 9.8% 1

6 Las Vegas-Paradise, Nev. 40.44 9.6% 91

7 Sacramento--Arden-Arcade--Roseville, Calif.

44.06 9.3% 54

8 Tucson, Ariz. 45.87 9.2% 33

9 Stockton, Calif. 39.95 9.1% 93

10 Bakersfield-Delano, Calif. 37.84 8.9% 98

Note: CoreLogic June 2012


4


For this reason, a RESi score of 100 indicates a market where all three components are strongest for all geographies back to 2000. On the flip side, a score of 0 would indicate a market that has the weakest readings for all components over the history of the index. In practice, the score generally ranges between the low 20’s and high 70’s, with an average of approximately 50.

Most Improved Markets

The 10 most improved markets (based on year-over-year change in RESi from June 2011 to June 2012) represent an interesting mix. The most improved markets are primarily concentrated in the west and include markets with very low RESi scores (Las Vegas or Stockton) and markets with high RESi scores (Boise or San Jose) (Figure 1). The presence of a mix of markets indicates strength from a relative and historical perspective. Further, there are a diverse set of economic factors driving the growth, suggesting broad economic improvement.

Boise, Idaho, is the most improved market with a RESi score of 49, the highest level for this market since July 2008 and improvements across all three RESi sub-indices. Boise’s unemployment rate declined from 8.9 percent in June 2011 to 7.3 percent in June 2012, driven mainly by increases in mining, logging and construction

employment.4 The employment growth follows extraordinary improvements in the housing market as evidenced by a 15.9 percent year-over-year increase in home prices in June 2012 following a -9 percent year-over-year change last year. The acceleration in house price growth was propelled by a drop in inventory as the months’ supply of listings fell to 4.8, down from 7.4 a year ago. This is below the 6 months’ supply mark that is conventionally considered to indicate a “normal” market and suggests further upward pressure on prices. Continued increases in prices will put downward pressure on negative equity, providing borrowers new opportunities to refinance or sell.

Phoenix, Arizona is the second

most improved market. Like Boise,

Phoenix had impressive house price

growth over the past year, improving

from year-over-year declines of

-8.4 percent in June 2011 to a year-

over-year increase of 16 percent

in June 2012. The rise in prices is

primarily due to a very large drop in

REO sales, which fell from 35 percent

a year ago to 10 percent in June.

Moreover, the pipeline of distressed

properties is declining at the same

time the serious delinquency rate is

falling (from 9.2 percent a year earlier

to 5.7 percent in June). These trends

point to a further decrease in REO

home sales. The improving housing

market has spurred other economic

activity, including new construction

jobs, which are the driving force

behind the impressive drop in the

unemployment rate, to 7.5 percent,

down from 9.1 percent a year ago.

San Jose, California, is the top-

ranked overall market according to

RESi and the fifth most improved

market. San Jose hit its bottom fairly

early in the economic recession at

the beginning of 2009 with a RESi

value of 44. Since then, San Jose

slowly improved until the middle

of 2011, at which point small

gains in strength transformed

into large accelerating increases.

This sudden rise in market

health is unambiguously tied

to Silicon Valley and the recent

growth in the technology sector.

While other markets on our top 10

list showed large improvements

in the Real Estate Health Index

leading similar improvements in the

Economic Health Index, in San Jose

it was just the opposite. It is worth

noting that the drop in the San Jose

unemployment rate from 10.2 percent

a year ago to 8.8 percent in June 2012

was not driven by a single sector, but

is caused by broad-based growth in

areas such as information, education,

health services and construction. Cont...

“…the majority of the most improved

markets are in western markets, which

peaked and bottomed earlier than

many eastern and southern markets.”

Footnote

4 Source: Bureau of Labor Statistics


5


Black Gold or Most Improved States

In analyzing the absolute state level rankings of RESi, a clear story emerges—oil. The strongest state by far is North Dakota, with a RESi reading of 71 (Figure 2). This is followed by South Dakota with a value of 67, and in distant third is Wyoming with a value of 57. Recent advances in horizontal drilling and hydraulic fracking technology have allowed the oil and gas industry to extract gas in areas that previously had been thought too difficult or uneconomical to develop. In particular, North Dakota, home to the majority of the Bakken Shale Oil Field, is heavily benefiting from recent oil discoveries resulting from these new techniques and, as a result, has become a major participant in the American Oil Boom. In fact, North Dakota recently became the second most oil-producing state in the United States, passing Alaska and California earlier this year5.

The current RESi value in North Dakota is a record high for that state. This is mainly driven by record levels of state GDP growth and employment levels. It should be noted that the strength is not only at the state level, but also at the CBSA level with all three North Dakota CBSAs in the top 10 strongest markets list. While most of the job growth is coming from the mining and logging sector, there is also remarkable growth in construction, transportation, professional services

and similar jobs that are creating the new infrastructure needed to support this boom6.

The growth does not stop in North Dakota, but can also be seen in nearby states with shale fields, such as Wyoming, Montana and Utah, as well as neighboring non-oil producing states due to spillover effects. This is due in part to the current build-up of the infrastructure that is needed to transport the oil from the plains to refineries across the country, such as new pipelines, rails and trucks, as well as to support the new workforce moving into the area.

Conclusion

While there are a large number of strong or improving markets

in the U.S., the majority of the

most improved markets are in

western markets, which peaked and

bottomed earlier than many eastern

and southern markets. While timing

is a factor, many of the western hard-

hit states observe a non-judicial

approach to foreclosure proceedings

which shortens the foreclosure cycle

allowing inventories of distressed

properties to clear more quickly. It

should be noted that the Northeast

has a high concentration of the least

improved markets, which include

markets in New York, New Jersey and

Pennsylvania, all judicial foreclosure

states. As noted in prior editions of

MarketPulse, judicial foreclosure

states are prone to foreclosure

congestion which can delay

improvement and hold back growth. End.

FIGuRE 2. REAL ESTATE STRENGTH INDEx (RESi)As of June 2012

Weaker <=45 45–50

HI

AK

CA

NV

OR

WA

ID

UT

AZ NM

CO

WY

ND

SD

NE

KS

OK

TX LA

AR

MO

IA

MN

WI

IL

MI

IN

KY

TN

MS AL GA

FL

SC

NC

VA

PA

NY

VTNH

ME

MA

50–55 55–60 >60 Stronger

RICT

DE

MD

DC

NJ

MT

Source: CoreLogic RESi Index

Footnote

5 Source: Energy Information Administration6 Bureau of Labor Statistics


6


Fine-Tuning Your Instrument

By Gilberto Méndez

The Home Affordable Refinance Program (HARP) was first introduced in 2009 and

offered refinancing to those who did not qualify for a conventional refinance. Unfortunately, HARP came with a loan–to-value (LTV) cap and other restrictions, leaving a lot of underwater homeowners to search for a life vest. After reassessing the effectiveness of HARP, the Federal Housing Finance Agency (FHFA) reintroduced an updated version of the program, dubbed HARP 2.0, providing millions of homeowners a new opportunity to qualify for refinancing. This newer HARP 2.0 had no LTV restriction and removed obstacles to lenders that prevented them from doing more HARP business.

Since early 2012, underwater borrowers began taking advantage of HARP 2.0, especially in light of historically low interest rates. The refinance activity of GSE loans with

high LTV’s (80 percent or greater)

has shown a steady increase during

the last few months. As of June 2012,

52 percent of refinance originations

had LTVs in excess of 100 percent,

more than twice the share just a few

months earlier. Moreover, 23 percent

had an LTV of greater than 125 percent,

which was virtually nonexistent even

in late 2011.

HARP 2.0 has allowed high LTV borrowers more opportunities to take advantage of much lower interest rates through refinancing resulting in lower mortgage payments and increased cash flows. It also provides greater affordability to help avoid foreclosure. Just as an instrument may need fine-tuning to improve its performance, HARP 2.0 reflects the tuning necessary to delight many homeowners’ ears.

MarketWatch, September 7Will jobs data hurt real-estate recovery?Recent weeks have seen some upbeat news about the housing market. According to data released this week by CoreLogic...

National Mortgage Professional Magazine, September 4CoreLogic Report Finds Largest Rise in Home Sale Prices in Six YearsCoreLogic has released its July Home Price Index (HPI) which found that home prices nationwide, including distressed sales, increased on a year-over-year basis by 3.8 percent in July 2012 compared to July 2011.

Wall Street Journal, September 4Here’s More Evidence That Home Prices Have Hit BottomMoreover, prices have shot up by 9.6% from February, when they registered their lowest levels of the housing downturn, according to CoreLogic data released Tuesday.

The Street, September 3Escaping The Underwater WorldA report from CoreLogic indicated last month that the number of underwater mortgages recently declined to its lowest level in three years.

Orange County Register, September 3Calif. home prices jump 6%, CoreLogic saysPrices for standard home sales in California jumped 6 percent in July—a margin of home price appreciation not seen since before the housing crash occurred, CoreLogic’s latest home price report shows.

Bloomberg, August 28Why Home Price Gains Might Even Stick This TimeThe question is: Will prices hold or even grow in the fall? Or will they continue the market’s recent trend of what CoreLogic calls a “Sisyphean slide,” by which price decreases in the second half of the year erase any gains.

In the News

GSE HIGH LTV CONVENTIONAL REFINANCES BY MONTHRefinance Share

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Jan

-09

Mar

-09

May

-09

Jul-

09

Sep

-09

No

v-0

9

Jan

-10

Mar

-10

May

-10

Jul-

10

Sep

-10

No

v-10

Jan

-11

Mar

-11

May

-11

Jul-

11

Sep

-11

No

v-11

Jan

-12

Mar

-12

May

-12

80% - 100% 100% - 110% 110% - 125% 125%+

Mendez: gse high ltv 091212

Source: CoreLogic June 2012

End.

http://www.marketwatch.com/story/will-jobs-data-hurt-real-estate-recovery-2012-09-07

http://nationalmortgageprofessional.com/news31128/corelogic-report-finds-largest-rise-home-sale-prices-six-years

http://blogs.wsj.com/developments/2012/09/04/heres-more-evidence-that-home-prices-have-hit-bottom/

http://www.thestreet.com/story/11682890/1/escaping-the-underwater-world.html

http://www.ocregister.com/articles/prices-370664-home-jump.html

http://www.businessweek.com/articles/2012-08-28/why-home-price-gains-might-actually-stick-this-time


7


NATIONAL SuMMARY JuLY 2012

Aug 2011

Sep 2011

Oct 2011

Nov 2011

Dec 2011

Jan 2012

Feb 2012

Mar 2012

Apr 2012

May 2012

Jun 2012

Jul 2012 2010 2011 2012**

Total Sales* 375 333 308 298 308 249 279 366 365 407 374 364 4,098 3,885 2,404

— New Sales* 25 23 21 22 24 16 19 26 24 27 25 22 338 269 159

— Existing Sales* 255 225 205 194 201 158 178 242 249 285 269 263 2,647 2,532 1,644

— REO Sales* 63 56 54 55 53 49 54 63 58 58 45 44 797 750 371

— Short Sales* 29 26 25 25 27 23 25 32 31 35 33 33 275 300 212

Distressed Sales Share 24.5% 24.7% 25.8% 26.8% 26.2% 29.0% 28.2% 26.0% 24.5% 22.8% 21.0% 21.1% 26.2% 27.0% 24.3%

HPI MoM -0.2% -0.7% -1.2% -1.1% -0.9% -0.9% -0.5% 1.3% 2.3% 2.5% 1.9% 1.3% -0.3% -0.3% 1.1%

HPI YoY -3.7% -3.0% -3.1% -3.4% -3.3% -2.2% -1.1% 0.6% 1.7% 2.8% 3.3% 3.8% -0.3% -4.3% 1.3%

HPI MoM Excluding Distressed -0.4% -0.7% -1.1% -1.0% -0.8% -0.3% -0.1% 1.2% 1.7% 2.0% 2.0% 1.7% -0.3% -0.4% 1.2%

HPI YoY Excluding Distressed -4.1% -4.0% -4.0% -4.3% -4.2% -3.4% -2.5% -0.8% 0.2% 1.4% 2.8% 4.2% -1.7% -4.1% 0.3%

90 Days + DQ Pct 7.2% 7.2% 7.3% 7.3% 7.3% 7.3% 7.1% 6.9% 6.9% 6.8% 6.8% 6.7% 8.1% 7.4% 6.9%

Foreclosure Pct 3.4% 3.5% 3.5% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.3% 3.2% 3.2% 3.5% 3.4%

REO Pct 0.5% 0.5% 0.6% 0.5% 0.6% 0.6% 0.5% 0.5% 0.4% 0.4% 0.4% 0.4% 0.6% 0.6% 0.5%

Pre-foreclosure Filings* 140 127 129 127 112 123 119 133 120 128 132 132 2,098 1,516 887

Completed Foreclosures* 75 83 69 71 69 72 63 60 54 58 62 58 1,125 907 427

Negative Equity Share 24.5% 24.4% 24.7% 24.9% 25.2% 24.7% 24.2% 23.7% 23.2% 22.7% 22.3% 21.8% 25.3% 24.9% 23.2%

Negative Equity* 11,675 11,618 11,783 11,943 12,108 11,858 11,624 11,374 11,178 10,975 10,779 10,588 11,904 11,820 11,196

Months Supply SDQ Homes 8.08 9.11 9.85 10.19 9.81 12.12 10.50 7.81 7.74 6.86 7.41 7.54 10.43 9.82 8.57

* Thousands of units **Year-to-Date NOTE: Data may be light in some jurisdictions. NOTE: For all sales data the most recent four months are adjusted upwards in order to take into account lags in data reporting.

LARGEST 25 CBSA SuMMARY JuLY 2012

Total Sales

12-month sum

REO Sales

12-month sum

Short Sales

12-month sum

Distressed Sales Share (sales

12-month sum)

Total Sales

YOY 12- month sum

Cumulative Dom Mean

YoY Change

Cumulative Sold

Dom Mean YoY

ChangeHPI

MoMHPI YoY

90 Days+ DQ Pct

Pre-Foreclosure

Filings 12-month

sum

Completed Foreclosures

12-month sum

Negative Equity Share

Months’ Supply

Distressed Homes

Chicago-Joliet-Naperville, IL 76,643 17,362 8769 34.1% 18.0% 17.9% -18.0% 2.5% -1.4% 10.3% 61,104 19,236 29.3% 19.6

Los Angeles-Long Beach-Glendale, CA 85,257 20,446 13585 39.9% 8.7% 2.6% 3.6% 1.1% 2.5% 6.1% 51,340 19,599 22.3% 10.2

Atlanta-Sandy Springs-Marietta, GA 68,253 16,562 7895 35.8% 22.4% 19.5% -5.9% 3.0% -0.3% 7.8% 102,231 36,346 40.5% 12.9

New York-White Plains-Wayne, NY-NJ 63,583 2,793 3290 9.6% 1.0% 16.6% 11.3% 3.0% 3.4% 8.7% 13,859 1,015 12.0% 15.4

Washington-Arlington-Alexandria, DC-VA-MD-WV

58,805 7,165 6853 23.8% -2.4% N/A N/A 1.2% 4.4% 5.6% 28,782 5,816 23.1% 9.2

Houston-Sugar Land-Baytown, Tx 82,044 11,669 3616 18.6% -6.6% -1.4% -14.2% 0.7% 5.4% 4.5% 15,684 16,212 10.1% 5.2

Phoenix-Mesa-Glendale, AZ 106,034 20,671 20509 38.8% 2.5% -10.7% -39.6% 2.1% 19.9% 5.6% 59,016 32,722 40.6% 4.4

Riverside-San Bernardino-Ontario, CA 73,327 23,856 13835 51.4% 0.9% 8.2% -2.4% 1.1% 2.4% 8.4% 44,978 23,670 40.7% 9.1

Dallas-Plano-Irving, Tx 67,789 9,705 3890 20.1% 4.7% -3.1% -13.0% 1.2% 3.8% 4.6% 40,495 11,153 10.7% 5.0

Minneapolis-St. Paul-Bloomington, MN-WI 36,412 6,773 1953 24.0% -4.4% 7.0% -6.4% 2.5% 3.9% 4.2% 25,501 12,761 17.8% 8.3

Philadelphia, PA N/A N/A N/A N/A N/A 12.6% -0.1% 3.0% 1.8% 5.7% 8,139 4,032 9.3% N/A

Seattle-Bellevue-Everett, WA 34,578 5,020 4158 26.5% 15.5% 10.5% -9.1% 1.7% 5.6% 6.5% 9,744 5,947 18.4% 11.2

Denver-Aurora-Broomfield, CO 47,774 8,471 4208 26.5% 17.5% N/A N/A 1.4% 8.4% 3.6% 24,445 9,114 18.3% 4.4

San Diego-Carlsbad-San Marcos, CA 40,097 7,747 8091 39.5% 10.5% 21.5% 13.2% 1.1% 0.0% 5.1% 18,158 7,267 28.0% 7.0

Santa Ana-Anaheim-Irvine, CA 31,737 4,787 6165 34.5% 9.4% -5.5% -9.6% 1.6% 1.9% 4.5% 16,435 5,410 17.9% 7.6

Tampa-St. Petersburg-Clearwater, FL 52,806 7,622 7732 29.1% -1.9% 25.3% -23.6% 1.0% 5.3% 16.5% 26,002 12,590 45.1% 16.6

Baltimore-Towson, MD 30,616 2,703 2671 17.6% 2.5% N/A N/A 0.9% 1.6% 7.8% 5,149 1,478 17.9% 13.4

St. Louis, MO-IL 42,066 8,754 2249 26.2% 6.0% 15.5% -5.7% 2.5% 0.6% 4.5% 15,710 9,497 16.2% 5.6

Nassau-Suffolk, NY 22,268 899 430 6.0% 2.2% 23.2% 21.7% 0.6% -0.6% 10.5% 8,471 745 9.2% 24.6

Oakland-Fremont-Hayward, CA 36,737 8,721 7019 42.8% 9.5% N/A N/A 2.0% 5.1% 5.3% 18,274 8,887 29.8% 7.5

Warren-Troy-Farmington Hills, MI 39,544 11,921 2030 35.3% 2.7% N/A N/A 1.6% 6.6% 4.8% 17,177 13,294 35.5% 6.1

Portland-Vancouver-Hillsboro, OR-WA 29,497 4,638 3432 27.4% 11.8% N/A N/A 1.2% 3.7% 5.4% 9,669 5,595 17.5% 8.5

Sacramento--Arden-Arcade--Roseville, CA 38,625 11,471 8491 51.7% 8.3% N/A N/A 2.3% 4.6% 6.3% 21,339 11,718 36.7% 7.4

Edison-New Brunswick, NJ 24,003 951 1906 11.9% 5.5% 22.2% 16.7% 0.4% -0.7% 9.2% 3,897 646 14.8% 16.5

Orlando-Kissimmee-Sanford, FL 42,971 7,908 8792 38.9% -3.6% -1.4% -12.8% 2.1% 8.0% 17.0% 20,252 11,272 47.9% 16.7

NOTE: Data may be light in some jurisdictions. NOTE: For all sales data the most recent four months are adjusted upwards in order to take into account lags in data reporting. NOTE: Largest CBSAs are based on active loan count.


8


STATE SuMMARY JuLY 2012

State

Total Sales

12-month sum

REO Sales

12-month sum

Short Sales

12-month sum

Distressed Sales Share

(sales 12-month

sum)

Total Sales YOY 12-month

sum

Cumulative Dom Mean

YoY Change

Cumulative Sold

Dom Mean YoY

ChangeHPI

MoMHPI YoY

90 Days+ DQ Pct

Pre-Foreclosure

Filings 12-month sum

Completed Foreclosures 12-month sum

Negative Equity Share

Months’ Supply

Distressed Homes

AK 9,921 772 335 11.2% -3.0% N/A N/A 0.9% 5.3% 2.2% 1,516 924 4.9% 2.2

AL 30,171 4,006 1,102 16.9% -24.5% 24.3% -11.7% 1.0% -4.6% 5.4% 8,642 6,574 13.7% 11.5

AR 38,446 1,947 1,611 9.3% -4.0% 7.1% -5.7% -0.2% 1.8% 5.4% 7,071 6,857 11.3% 4.9

AZ 143,874 29,851 24,576 37.8% 3.7% 0.2% 14.5% 1.8% 16.6% 5.4% 80,485 45,278 38.5% 4.6

CA 467,324 118,625 83,995 43.4% 7.4% 8.0% 1.3% 1.3% 4.4% 5.9% 250,575 118,424 28.6% 8.1

CO 93,888 16,982 7,810 26.4% 12.8% 5.7% -0.3% 1.3% 7.3% 3.5% 47,134 18,547 17.5% 4.1

CT 34,525 3,247 3,460 19.4% 3.8% 24.5% 7.8% 2.5% -1.7% 7.4% 1,591 3,586 13.4% 12.2

DC 6,609 362 227 8.9% -1.6% N/A N/A 1.2% 5.8% 5.7% 604 120 9.8% 9.5

DE 8,323 1,434 478 23.0% 0.1% 21.3% 5.9% 0.3% -4.8% 6.8% 1,693 2,690 15.9% 15.1

FL 400,932 65,185 56,092 30.2% 0.3% 18.7% 5.7% 2.0% 6.6% 16.4% 163,872 92,046 42.0% 14.3

GA 115,486 25,227 9,806 30.3% 15.7% 20.8% -0.4% 2.6% -0.2% 7.0% 142,921 54,019 35.3% 10.5

HI 15,371 1,408 1,334 17.8% -2.1% 14.2% -4.4% 1.2% 5.7% 6.5% 4,130 445 10.0% 8.6

IA 30,687 1,879 1,257 10.2% -34.2% 10.1% 0.3% 1.2% 1.1% 3.8% 6,129 3,549 9.1% 5.2

ID 33,352 6,367 2,054 25.2% 6.9% 9.0% -14.5% 0.0% 10.0% 4.7% 13,737 5,176 21.3% 3.9

IL 132,569 24,727 12,203 27.9% 15.8% 19.6% -8.7% 2.1% -1.7% 8.8% 81,789 27,471 25.1% 14.4

IN 111,268 17,631 2,761 18.3% 14.2% 6.2% N/A 0.2% 1.7% 6.1% 15,984 17,006 9.2% 5.5

KS 29,962 3,447 1,370 16.1% 11.7% N/A N/A 1.8% 3.3% 4.1% 3,088 2,800 7.9% 5.1

KY 35,171 3,670 1,546 14.8% -24.7% 8.6% -12.8% -0.2% 0.9% 5.3% 7,133 2,118 9.3% 7.8

LA 47,325 6,033 1,344 15.6% -9.6% 13.7% 9.4% 2.4% 3.9% 5.7% 14,299 10,198 14.9% 6.4

MA 90,819 9,502 720 11.3% 33.8% N/A N/A 1.3% 3.7% 5.5% 7,741 7,994 15.2% 6.2

MD 66,899 6,879 7,786 21.9% 0.2% 39.1% -7.5% 1.4% 2.3% 8.1% 12,004 3,723 22.7% 14.2

ME 7,376 608 247 11.6% -6.2% N/A N/A 1.6% 3.6% 7.1% 1,734 608 7.6% 17.1

MI 142,998 46,473 5,578 36.4% 4.9% 17.0% 9.4% 2.0% 4.8% 5.3% 54,069 61,285 32.0% 6.0

MN 60,223 9,303 2,356 19.4% 0.2% 14.2% -6.4% 2.5% 4.2% 3.9% 28,144 14,751 16.7% 6.7

MO 82,210 17,115 3,364 24.9% 11.3% 23.8% -8.1% 2.5% 1.6% 4.2% 24,616 17,741 15.8% 4.8

MS N/A N/A N/A N/A N/A N/A N/A 0.9% 4.9% 7.1% 4,894 1,062 26.5% N/A

MT 13,484 1,569 544 15.7% 5.5% N/A N/A 1.3% 5.6% 2.7% 3,748 1,726 7.1% 3.1

NC 108,962 9,995 7,165 15.7% 4.6% 10.4% -8.1% 0.8% 1.4% 5.5% 51,231 27,065 13.5% 7.8

ND 13,901 276 237 3.7% 23.6% N/A N/A 0.9% 7.1% 1.5% 232 575 5.4% 0.7

NE 26,170 1,573 1,317 11.0% 4.9% N/A N/A 1.0% 2.7% 2.7% 3,846 2,329 11.5% 2.6

NH 17,141 3,075 1,247 25.2% 11.8% 20.5% 15.3% 1.1% 1.1% 4.3% N/A 2,829 20.6% 5.6

NJ 77,044 3,721 6,987 13.9% 1.2% 21.3% 15.2% 0.7% -0.8% 11.1% 18,766 2,582 18.0% 21.0

NM 21,490 2,535 1,367 18.2% -2.3% N/A N/A 2.0% 3.0% 5.7% 7,632 2,025 12.8% 8.0

NV 70,818 24,930 13,734 54.6% 1.4% -8.9% 22.2% 1.9% 5.1% 11.9% 7,932 22,573 57.7% 9.1

NY 154,592 5,745 3,705 6.1% 4.5% 20.8% 18.9% 4.1% 5.3% 8.1% 25,970 4,434 8.2% 11.9

OH 140,999 26,052 9,718 25.4% 3.8% 11.5% -1.9% 1.1% -0.5% 6.6% 59,469 27,077 24.0% 7.9

OK 65,137 5,399 1,555 10.7% 7.2% -2.0% -2.1% 0.0% 1.6% 5.1% 17,419 9,343 8.0% 3.6

OR 50,964 9,067 5,142 27.9% 7.6% 8.9% -6.3% 1.5% 3.7% 5.5% 17,511 10,231 18.3% 7.8

PA 129,823 12,050 4,203 12.5% 4.8% 12.6% -0.7% 1.7% 1.7% 5.8% 22,108 11,804 9.3% 7.6

RI 11,635 1,587 1,258 24.4% 8.9% 19.1% 10.5% 1.6% -2.2% 7.3% 4,400 2,664 22.3% 9.7

SC 63,113 9,790 4,213 22.2% 9.5% 16.0% -4.2% 2.2% 6.3% 6.2% 8,353 10,756 15.8% 7.3

SD N/A N/A N/A N/A N/A N/A N/A 2.5% 8.3% 2.4% 231 32 N/A N/A

TN 104,256 17,235 4,896 21.2% 11.0% N/A N/A 0.6% 0.9% 5.6% 27,690 24,955 17.0% 4.8

Tx 378,841 46,357 15,086 16.2% 1.3% 6.4% -15.9% 0.6% 4.7% 4.3% 117,356 56,846 8.5% 3.9

uT 47,598 7,697 3,897 24.4% 9.8% N/A N/A 2.0% 9.3% 4.5% 27,813 6,546 17.2% 4.8

VA 91,230 13,930 7,470 23.5% -4.8% 29.9% -12.3% 1.3% 4.4% 3.8% 65,076 14,203 19.4% 6.2

VT 10,672 396 N/A N/A 31.5% 27.0% 10.8% 2.7% 3.3% 4.0% N/A N/A N/A 3.6

WA 83,922 12,789 8,399 25.2% 8.1% 19.8% -6.9% 1.3% 3.6% 6.5% 22,749 15,095 18.6% 10.5

WI 68,225 8,147 2,831 16.1% 6.3% 18.5% -6.4% 1.5% 0.1% 4.2% 21,825 12,640 15.1% 5.7

WV N/A N/A N/A N/A N/A 10.8% 5.5% 1.2% 2.5% 3.8% 4,430 633 7.2% N/A

WY 5,857 546 194 12.6% 10.1% N/A N/A 0.7% 4.9% 2.2% 821 790 9.1% 3.2

NOTE: Data may be light in some jurisdictions. NOTE: For all sales data the most recent four months are adjusted upwards in order to take into account lags in data reporting.


9


Prices ► Home prices nationwide, including distressed sales, increased on a year-over-year basis by 3.8 percent in July 2012. This year-over-year growth is the biggest jump in almost six years (since September 2006). On a month-over-month basis, home prices, including distressed sales, increased by 1.3 percent in July 2012. The July 2012 figures marks the fifth consecutive increase in home prices nationwide on both a year-over-year and month-over-month basis. Excluding distressed sales, home prices nationwide increased on a year-over-year basis by 4.25 percent in July 2012. Excluding distressed sales, the year-over-year growth represents the largest growth since August 2006.

► The negative equity share for the end of the second quarter 2012 (June 2012) was 22.3 percent, a drop from the end of the first quarter (March 2012) rate of 23.7 percent. The number of properties in negative equity fell by 595,000 from 11.4 million properties to 10.8 million properties. The largest drops in negative equity share were in Idaho, Arizona, and Utah. Nevada and Florida continue to have the largest negative equity shares of all states at 58.6 and 42.7 percent, respectively.

YoY HPI GROWTH FOR 25 HIGHEST RATE STATES Min, Max, Current since Jan 1976

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

AZ ID UT

SD

CO

ND FL

SC

DC HI

MT

NY

AK

NV

MS

WY MI

TX

VA

CA

MN LA

MA

OR

ME

Current

2.6x3.57 5pt gothamPrices: yoy hpi growth for 25 lowest rate states jul 2012

Source: CoreLogic July 2012

HOME PRICE INDExPct Change from Year Ago Pct Change from Month Ago

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

Jan

-02

Jul-

02

Jan

-03

Jul-

03

Jan

-04

Jul-

04

Jan

-05

Jul-

05

Jan

-06

Jul-

06

Jan

-07

Jul-

07

Jan

-08

Jul-

08

Jan

-09

Jul-

09

Jan

-10

Jul-

10

Jan

-11

Jul-

11

Jan

-12

Jul-

12

All Transactions Excluding Distressed All Transactions - Right Axis

2.75x3.66 5pt gotham bookPrices: home price index jul 2012


NEW LISTING/SOLD LISTING PRICE DISCOuNT

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

Jan

-07

Ap

r-0

7

Jul-

07

Oct

-07

Jan

-08

Ap

r-0

8

Jul-

08

Oct

-08

Jan

-09

Ap

r-0

9

Jul-

09

Oct

-09

Jan

-10

Ap

r-10

Jul-

10

Oct

-10

Jan

-11

Ap

r-11

Jul-

11

Oct

-11

Jan

-12

Ap

r-12

Jul-

12

2.41x3.38Prices: new listing/sold listing price discount jul 2012


NEW LIST PRICE YoY Change

-20%

-15%

-10%

-5%

0%

5%

10%

Jan

-08

Mar

-08

May

-08

Jul-

08

Sep

-08

No

v-0

8

Jan

-09

Mar

-09

May

-09

Jul-

09

Sep

-09

No

v-0

9

Jan

-10

Mar

-10

May

-10

Jul-

10

Sep

-10

No

v-10

Jan

-11

Mar

-11

May

-11

Jul-

11

Sep

-11

No

v-11

Jan

-12

Mar

-12

May

-12

Jul-

12

New List Price - YOY Chg HPI YOY %Chg

2.49x3.39Prices: new list price jul 2012


REO DISCOuNT

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

0%

10%

20%

30%

40%

50%

60%

70%

Jan

-02

Jul-

02

Jan

-03

Jul-

03

Jan

-04

Jul-

04

Jan

-05

Jul-

05

Jan

-06

Jul-

06

Jan

-07

Jul-

07

Jan

-08

Jul-

08

Jan

-09

Jul-

09

Jan

-10

Jul-

10

Jan

-11

Jul-

11

Jan

-12

Jul-

12

REO Price Discount Distressed Clearing Ratio - Right Axis

2.52x3.48Prices: REO discount jul 2012



10


Performance ► Mortgages that were at least 90 days past due and in foreclosure or real estate owned (REO) are at their lowest level since June 2009 and reflect a 10 percent improvement since July 2011. Of these delinquent mortgages, subprime loans show a decrease for 18 consecutive months. Approximately 12.5 percent of all subprime loans are in foreclosure, the lowest level of foreclosure inventory since November 2010.

► The number of completed foreclosures fell by 16 percent from 69,000 in July 2011 to 58,000 in July 2012. The number of REO sales fell by 23 percent from 57,000 in July 2011 to 44,000 in July 2012. The distressed clearing ratio (the ratio of REO sales to completed foreclosures) hovers around 75 percent, down from the April 2012 high of 107 percent. While the number of completed foreclosures is well below the peak, there are still 1.3 million borrowers in some stage of the foreclosure process.

CONFORMING PRIME SERIOuS DELINQuENCY RATEBy Origination Year

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

3 m

on

ths

6 m

ont

hs

9 m

ont

hs

12 m

ont

hs

15 m

ont

hs

18 m

on

ths

21 m

ont

hs

24 m

ont

hs

27 m

ont

hs

30 m

ont

hs

33 m

on

ths

36 m

ont

hs

39 m

ont

hs

42

mo

nths

45

mo

nths

48

mo

nths

51 m

ont

hs

54 m

ont

hs

57 m

ont

hs

60

mo

nths

2012 Total 2011 Total 2010 Total


3.08x3.45Performance: conforming prime serious del rate jul 2012


2012 Total 2011 Total 2010 Total 2009 Total 2008 Total 2007 Total

JuMBO PRIME SERIOuS DELINQuENCY RATEBy Origination Year

0%

5%

10%

15%

20%

25%

3 m

on

ths

6 m

ont

hs

9 m

ont

hs

12 m

ont

hs

15 m

ont

hs

18 m

on

ths

21 m

ont

hs

24 m

ont

hs

27 m

ont

hs

30 m

ont

hs

33 m

on

ths

36 m

ont

hs

39 m

ont

hs

42

mo

nths

45

mo

nths

48

mo

nths

51 m

ont

hs

54 m

ont

hs

57 m

ont

hs

60

mo

nths



3.1x3.42Performance: jumbo prime serious del rate jul 2012


2012 Total 2011 Total 2010 Total 2009 Total 2008 Total 2007 Total

SERIOuS DELINQuENCIES FOR 25 HIGHEST RATE STATES

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%F

L

NV NJ IL NY

MD CT RI

GA

MS

ME

DE

OH HI

WA SC IN CA

LA

PA

NM TN

DC

AZ

NC

Current

2.5x3.57Performance: serious del for 25 highest rate states jul 2012


OVERALL MORTGAGE PERFORMANCE

0.0%

0.1%

0.2%

0.3%

0.4%

0.5%

0.6%

0.7%

0.8%

0.9%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

Jan

-02

Jul-

02

Jan

-03

Jul-

03

Jan

-04

Jul-

04

Jan

-05

Jul-

05

Jan

-06

Jul-

06

Jan

-07

Jul-

07

Jan

-08

Jul-

08

Jan

-09

Jul-

09

Jan

-10

Jul-

10

Jan

-11

Jul-

11

Jan

-12

Jul-

12

90+ Days DQ Pct Foreclosure Pct REO Pct - Right Axis

2.53x3.42Performance: overall mortgage performance jul 2012


PRE-FORECLOSuRE FILINGS AND COMPLETED FORECLOSuRESIn Thousands (3mma) In Thousands

0

50

100

150

200

250

0

20

40

60

80

100

120

Jan

-02

Jul-

02

Jan

-03

Jul-

03

Jan

-04

Jul-

04

Jan

-05

Jul-

05

Jan

-06

Jul-

06

Jan

-07

Jul-

07

Jan

-08

Jul-

08

Jan

-09

Jul-

09

Jan

-10

Jul-

10

Jan

-11

Jul-

11

Jan

-12

Jul-

12

Completed Foreclosures Pre-Foreclosure Filings - Right Axis

2.69x3.45Performance: pre foreclosure filings and completed

foreclosures jul 2012



11


Sales ► Total year-over-year home sales for July increased 6 percent. The distressed sale share remained at 21 percent in July, but it is still lower from a year ago when it was at 24 percent. The distressed sales share for Nevada (47 percent), California (36 percent) and Michigan (30 percent) remain the highest in the country for the month of July.

► The decrease in distressed sales share continues to be driven by a decreasing REO share—with the short sale share gradually increasing over the same time period. REO sales share remained at 12 percent in July, but much lower than a year earlier when the REO share was 17 percent. While distressed sales come at a discount to healthy sales, REO sales are discounted much more than short sales. Nationally, the distressed price discount remains at around 40 percent. The months’ supply of distressed properties (those with mortgages that are seriously delinquent) is at seven and a half months compared to nine months in July 2011.

CuMuLATIVE DAYS ON MARKETMean

110

120

130

140

150

160

170

180

Jan

-07

Ap

r-0

7

Jul-

07

Oct

-07

Jan

-08

Ap

r-0

8

Jul-

08

Oct

-08

Jan

-09

Ap

r-0

9

Jul-

09

Oct

-09

Jan

-10

Ap

r-10

Jul-

10

Oct

-10

Jan

-11

Ap

r-11

Jul-

11

Oct

-11

Jan

-12

Ap

r-12

Jul-

12

Active Sold

2.46x3.43Sales: Cumulative days on mkt jul 2012


MONTHS’ SuPPLY

6.0

7.0

8.0

9.0

10.0

11.0

12.0

13.0

0

2

4

6

8

10

12

14

16

Ap

r-0

7

Jul-

07

Oct

-07

Jan

-08

Ap

r-0

8

Jul-

08

Oct

-08

Jan

-09

Ap

r-0

9

Jul-

09

Oct

-09

Jan

-10

Ap

r-10

Jul-

10

Oct

-10

Jan

-11

Ap

r-11

Jul-

11

Oct

-11

Jan

-12

Ap

r-12

Jul-

12

Months' Supply Distressed Homes Months' Supply of Active Listings - R. Axis

2.59x3.57Sales: month’s supply jul 2012

Feb

-12


DISTRESSED SALE SHARE FOR 25 HIGHEST RATE STATESMin, Max, Current

0%

10%

20%

30%

40%

50%

60%

70%

80%N

V

CA MI

DE

AZ FL

GA

OR

NH RI

MO IL

OH

WA

TN SC

CT

UT

VA

CO ID IN MD

NM

NC

Current

2.33x3.48Sales: distressed sale share for 25 highest rate states jul 2012


DISTRESSED SALES AS PERCENTAGE OF TOTAL SALES

0%

5%

10%

15%

20%

25%

30%

35%

Jan

-06

May

-06

Sep

-06

Jan

-07

May

-07

Sep

-07

Jan

-08

May

-08

Sep

-08

Jan

-09

May

-09

Sep

-09

Jan

-10

May

-10

Sep

-10

Jan

-11

May

-11

Sep

-11

Jan

-12

May

-12

Short Sales Share REO Sales Share

2.62x3.37Sales: distressed sales as % of total sales jul 2012


SALES BY SALE TYPEIn Thousands

0

100

200

300

400

500

600

700

800

Jan-

06

May

-06

Sep

-06

Jan-

07

May

-07

Sep

-07

Jan-

08

May

-08

Sep

-08

Jan-

09

May

-09

Sep

-09

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Existing Home New Home REO Short

2.65x3.39Sales: sales by sale type jul 2012


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VARIABLE DESCRIPTIONS

Variable Definition

Total Sales The total number of all home-sale transactions during the month.

New Sales The total number of newly constructed residential housing units sold during the month.

Existing SalesThe number of previously constructed homes that were sold to an unaffiliated third party. DOES NOT INCLuDE REO AND SHORT SALES.

REO Sales Number of bank owned properties that were sold to an unaffiliated third party.

Short SalesThe number of short sales. A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property's loan.

Distressed Sales Share The percentage of the total sales that were a distressed sale (REO or short sale).

HPI MoM Percent increase or decrease in HPI single family combined series over a month ago.

HPI YoY Percent increase or decrease in HPI single family combined series over a year ago.

HPI MoM Excluding Distressed Percent increase or decrease in HPI single family combined excluding distressed series over a month ago.

HPI YoY Excluding Distressed Percent increase or decrease in HPI single family combined excluding distressed series over a year ago.

90 Days + DQ Pct The percentage of the overall loan count that are 90 or more days delinquent as of the reporting period. This percentage includes loans that are in foreclosure or REO.

Foreclosure Pct The percentage of the overall loan count that is currently in foreclosure as of the reporting period.

REO Pct The count of loans in REO as a percentage of the overall count of loans for the reporting period.

Pre-foreclosure FilingsThe number of mortgages where the lender has initiated foreclosure proceedings and it has been made known through public notice (NOD).

Completed ForeclosuresA completed foreclosure occurs when a property is auctioned and results in either the purchase of the home at auction or the property is taken by the lender as part of their Real Estate Owned (REO) inventory.

Negative Equity ShareThe percentage of mortgages in negative equity. The denominator for the negative equity percent is based on the number of mortgages from the public record.

Negative EquityThe number of mortgages in negative equity. Negative equity is calculated as the difference between the current value of the property and the estimated unpaid principal balance. If the mortgage debt is greater than the current value, the property is considered to be in a negative equity position.

Months' Supply Distressed HomesThe number of months it would take to sell all homes currently in distress of 90 days past due or more based on the current sales pace.

Total Sales YoY Change 12-month sum Percent increase or decrease in current 12 months of total sales over prior 12 months of total sales.

Distressed Clearing Ratio Represents REO sales divided by Completed Foreclosures.

Listing Price Discount Percentage calculated by dividing the mean new listing price by the mean sold listing price.

Cumulative DOM Mean YoY Change Percent increase or decrease in cumulative days on market (DOM) for listings active at the end of the month.

Cumulative Sold DOM Mean YoY Change Percent increase or decrease in cumulative days on market (DOM) for listings sold during the month.

Months' Supply of Active Listings Active Listings divided by 12 month average of sold listings for a given month.

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